More Institutions Playing the MLP Group: Sector Sees More Dedicated Institutional Investing, Showcased by Institutional Investor Magazine Making MLPs a Standalone Category

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Mr. Sighinolfi: Yes. Certainly at UBS, they've been a key component and a key source of investor interest for many years, because we have such a large wealth management network. I would say the interest in MLPs has grown in the last several years as the structure itself has proliferated out to more operating groups than it once did. Ten years ago we had 30 MLPs at roughly $30 billion in market cap; now we have over 90 with over $350 billion in market cap. And so as the space has grown, I think the interest has also grown.

I have seen many Barron's articles about MLPs this year, for example, which I think also has coincided with just a lack of yield in many other places and an ongoing quest for tax-deferred income. It's been a perfect storm of growth in terms of the number of companies in the sector and the interest from investors far and wide for tax-deferred income.

More institutions are starting to play the group. We've had a number of funds raised in the last several years to play this space and more dedicated MLP institutional investing. That's been a newer component over the last two or three years and was showcased by the fact that Institutional Investor made MLPs a standalone category several years ago.

TWST: How is all that impacting valuations today?

Mr. Sighinolfi: Valuations in the space continue to run, and we see EV/EBTIDA multiples for the MLPs continue to tick up. We also see transaction multiples continue to tick up.

I think that speaks to several things. One is that interest rates continue to decline, aiding capital costs and also making...

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